Florida’s prices, climate woo the wealth from other states

Tuesday

Aug 6, 2013 at 2:00 PMAug 6, 2013 at 2:10 PM

Wayne T. PriceFlorida Today

MELBOURNE, Fla. — Thousands of people are flocking to Florida and Brevard County because of low taxes, fewer regulations and other attributes, including beaches and nice weather. The people moving to Brevard over the past two decades are coming predominantly from two areas: New York City and South Florida.That migration to the Sunshine State is outlined in a new study by Travis H. Brown called “How Money Walks.” Brown, who is based in St. Louis, researched Census and IRS tax return data, in hopes of persuading officials in his home state of Missouri to nix the state income tax because Missouri, he said, is losing considerable amounts of wealth to states such as Florida, Texas and Arizona.But Mike Slotkin, an economist at the Florida Institute of Technology, said while a state’s taxes may play some role in wealth migration, the decisions people make usually involve more factors.“People migrate for lots of reasons — jobs, relationships, quality of life, housing amenity, cost of living differentials inclusive of tax burden, etc.,” said Slotkin. “I’m unsure how this reduces to a solely low vs. high tax state exercise.” Slotkin noted “Alaska is also a low-tax state, with a much different climate and migratory flows.” Brown said that since 1992, an estimated $95.6 billion in wealth has poured into Florida’s economy from people moving from states where the cost of business, and living, is higher.Those states that don’t acknowledge the significance of the numbers do so to their own disadvantage, Brown said in a recent interview with Florida Today.“A lot of those people are willingly ignorant of these facts,” he said, noting the wealth migration will continue if tax policies don’t change.That wealth is coming from people like Tommy and Mary Beth Corrigan, who are moving their spending power from New York to Brevard, where they now are buying clothes, home wares, automobiles and overall contributing to the social fabric.The retired firefighter and his photographer wife — who both had lived in Florida for a short period years ago — are building a 3,000-square-foot home in Viera, Fla., that dwarfs anything they could have afforded where they lived in Queens, N.Y.“The cost of living is just so much better here,” said Tommy Corrigan, 44.According to Brown’s study of the tax and census records, Florida saw gains from these top five states: New York, $18.92 billion; New Jersey, $11.41 billion; Illinois, $6.77 billion; Ohio, $6.46 billion; and Pennsylvania, $6.34 billion. All of these states have state income tax, while Florida does not.Florida’s 5.5 percent corporate income tax rate also is attractive to businesses.For Brevard, the study shows the county gained $2.8 billion in adjusted gross income from 1992-2010 from migration here. Much of the income, and population gain, came from South Florida, as well as Suffolk and Nassau counties in New York.Charlie and Mary Piligian moved to Viera a few weeks ago from Miami, where they have spent more than half a century.“Miami has been growing from a medium-sized city to a big city and getting a little congested,” said Charlie Piligian, 63, a former network sales executive for now-AT&T, “and we were looking for a more small-town atmosphere where we could retire and enjoy life.” They selected Brevard because it was about the halfway point from North and South Florida, and the climate was mostly warm to mild. They wanted the good medical facilities in Brevard and also the proximity to two airports and the chance to be closer to family.The shopping opportunities probably aren’t as ample as they are in Miami, he said, but the area seems to be growing, and Orlando isn’t a far drive from Viera.“It’s like I tell my wife,” Piligian said, “when you make a move like this there are always going to be pros and cons.” Bentley Smith, senior loan officer for the Melbourne, Fla.-based Dyer Mortgage Group, said one of the pros is how much more people are getting for the money when it comes to real estate here vs. other states.“It’s the perfect situation here,” said Smith. “Housing is quite reasonable and interest rates have been great. They realize 2-5 years from now, the interest rates will be higher and so will real estate.” Smith said one couple he worked with moved to Brevard from San Diego. A house near the beach they purchased in Brevard for $325,000 would have cost closer to $750,000 to $1 million in San Diego. Then there are taxes and other expenses.“The taxes here are less,” Smith said, “and the cost of living is less.” Brown noted that when people do leave Florida, they’re typically going to places that don’t have state income taxes.